How powerful is the fed? How much do they affect asset prices? The idea of a potential "ugly Tuesday" should give us a bit of a "hint". The fed has been buying treasuries among many other things to support the economy for months now. For the first time in weeks, the fed will go a day without buying treasury coupons according to their operation schedule. Then resume its $4 billion per day average on Wednesday. Last week, was the lowest amount of money they poured into markets since the pandemic has begun, ever so coincidentally, the same week things start to fall apart.
Obviously all speculation, all just a story to talk about for now. Looking into technicals though, thee is a strong case for a sell-off in the near future. Does it have to be tomorrow? No, the markets can continue to ride up the side of the rising wedge, and even attempt to reclaim it.
The 50, 100, and 200 ema's , and April/May highs are creating a massive point of confluence. For now, it's massive support. Volume was significantly lower on the buy up today. Far from a convicting bullish move. SPY remains under the 9 day ma. An island reversal pattern has been printed, often a sign of a strong impulsive reversal of the prior trend. Topped with a failed break above the mega phone pattern once again (red trendline).
The setup is there, a break of the 3 ma's to the downside should see a clean drop straight down to around 286 in midst of filling the May gap up. That dma break is what will be the big trigger for a strong 5%+ sell-off. Will it be Tuesday? Maybe. We'll be patient here waiting for the break. Could be some whip-sawing action in the short term. Patience. Interested to see how this turns out.
**Not trade advice, always do your own analysis first!*
Obviously all speculation, all just a story to talk about for now. Looking into technicals though, thee is a strong case for a sell-off in the near future. Does it have to be tomorrow? No, the markets can continue to ride up the side of the rising wedge, and even attempt to reclaim it.
The 50, 100, and 200 ema's , and April/May highs are creating a massive point of confluence. For now, it's massive support. Volume was significantly lower on the buy up today. Far from a convicting bullish move. SPY remains under the 9 day ma. An island reversal pattern has been printed, often a sign of a strong impulsive reversal of the prior trend. Topped with a failed break above the mega phone pattern once again (red trendline).
The setup is there, a break of the 3 ma's to the downside should see a clean drop straight down to around 286 in midst of filling the May gap up. That dma break is what will be the big trigger for a strong 5%+ sell-off. Will it be Tuesday? Maybe. We'll be patient here waiting for the break. Could be some whip-sawing action in the short term. Patience. Interested to see how this turns out.
**Not trade advice, always do your own analysis first!*
Comment:
Looks like the 318 gap fill will come first
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Nothing screams stable market conditions quite like 2% gap ups and downs though, right?
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Looking at a breakout retest and support to be found around 28 on the VIX:
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Comment:
VIX 47
Until that breaks, the VIX remains "contained".